Burger restaurant buy expected to whet investors' appetite

By Colin Taylor

The property includes a new 278sq m building and 26 car parks.
The property includes a new 278sq m building and 26 car parks.

A new Carl's Jr restaurant in Hawkes Bay is being offered for sale and leaseback by Restaurant Brands, giving investors the chance to sample the premium hamburger market.

The newest Carl's Jr property to be offered for sale is at 100 Nelson St in the centre of Hastings and is being marketed for sale by Charlie Oscroft and Simon Kerr of Colliers International. The outlet features in Colliers' first New Zealand Portfolio magazine for 2014 and will be sold by auction at 11am on Friday, March 14, at the agency's Napier office.

The property comprises a new 278sq m building and 26 car parks on a 2027sq m freehold site and generates net annual rental income of $164,500 on a new 12-year lease beginning next month. Rent reviews are every three years and rights of renewal give investors a total potential lease term of 40 years to March 2054. "This is a very unusual investment opportunity in Hastings due to its quality branding, the level of income and length of the lease term," Oscroft says.

"It is an excellent chance for investors like a high net worth individual or a family trust to acquire a premium quality investment. It will attract a great deal of interest from local as well as regional investors looking for solid long-term income and capital growth opportunities."

He says the strength of the Restaurant Brand name will be a major attraction for prospective buyers. Restaurant Brands is the New Zealand exchange-listed operator of KFC, Pizza Hut, Starbucks and Carl's Jr and is a corporate franchisor based in Auckland.

In a strong growth phase, across its four brands it has 176 stores and employs more than 3900 staff.

Total sales for the four brands for the year to February 2013 were nearly $312 million and are increasing.

Sales during the third quarter last year were more than $76 million, an increase of 5.4 per cent on the same period for the previous year.

The Carl's Jr restaurants were the largest contributor to the sales increase at $3.9 million in the quarter.

The Carl's Jr brand was established more than 70 years ago in California and there are now well over 1000 restaurants worldwide offering premium quality charbroiled 100 per cent beef hamburgers.

"Since launching its Carl's Jr brand in New Zealand in 2012, Restaurant Brands has opened eight very successful stores here," Oscroft says.

"A business like this makes an ideal commercial tenant - well-established with a successful financial history, large and with plans for further growth. These properties make very attractive long-term, passive, income-generating investments allowing the owners to sit back and collect the rent."

Simon Kerr, of Colliers Hawkes Bay office, says the new Carl's Jr is in a high-profile corner position on the main street. "It is a well-known site locally, having previously been the long-time home of Kelt Capital, a family owned business that offered substantial support to the Hawkes Bay community over the years.

"A property like this doesn't come up for sale very often in Hastings," Kerr says. "We expect it to be sought after. It is located right in the centre of town on a very busy thoroughfare and it will be a welcome addition for residents looking for a high-quality brand-name restaurant outlet."

Colliers has been involved in several sales and lease-back deals for Restaurant Brands including several KFCs and a Carl's Jr in Hamilton that sold through Oscroft for $2.8 million.

- NZ Herald

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